‘Joint venture better than franchise’

MAKE IT BETTER. Members of a cause-oriented group press for an affordable, efficient and transparent water distribution service in Iloilo City, in this undated photo. Metro Iloilo Water District recently increased its rates. IAN PAUL CORDERO/PN

ILOILO City – A partner, not a rival – this is what Metro Iloilo Water District (MIWD) wants Prime Water Infrastructure Corp. to be. According to MIWD corporate secretary Atty. Cyril Regalado, they are not totally against the entry of the Villar-owned company in this city.

“What we are questioning is Prime Water’s seeking a water distribution franchise with the city government,” clarified Regalado.

Prime Water should instead seek a joint venture with MIWD, the state-owned firm which already has the water distribution franchise for this city, he stressed.

Regalado cited the case of Metro Pacific Investments Corp. that in 2016 entered into a P2.8-billion joint venture with MIWD.

“May proposal ang Metro Pacific for a joint venture, water distribution man. Ginbutang namon sa public bidding as provided by law. That was why gin-publish namon kag ginhatag namon ang terms of reference,” said Regalado.

MIWD’s joint venture with Metro Pacific – the Metro Iloilo Bulk Water Supply. Corp. or MIBWSC – aimed at expanding its water distribution coverage considering that only 30 percent of the total population here are being served by the water district.

“Ang amon target malab-ot namon tanan nga consumers,” said Regalado.

MIWD is open to joint ventures with private water companies, he added, because establishing facilities would cost as much P12.8 billion.

Aside from ensuring water supply, MIWD’s joint venture with Metro Pacific also called for the rehabilitation, expansion, operation and maintenance of the water district’s existing water production facilities in Santa Barbara, Iloilo.

On the other hand, Prime Water of former senator Manny Villar applied for a franchise to establish, operate and maintain its own water supply system in this city.

This was a flawed move, said Regalado, citing the opinion of the Department of Interior and Local Government (DILG) that local government units (LGUs) could not grant franchises related to water.

“Ara gid na sa Constitution and Supreme Court rulings. Limited lang and franchising authority sang LGUs,” added Regaldo.

Prime Water was apparently following the move of South Balibago Resources, Inc. (SBRI) that the Sangguniang Panlungsod granted a 25-year water distribution franchise in 2016 for a limited area of service (Jaro district covering an estimated 10,000 households and commercial establishments in 34 waterless subdivisions and three barangays).

MIWD questioned the city council’s issuance of the franchise. DILG later issued an adverse position on the matter.

According to the DILG, only the National Water Resources Board (NWRB) can issue a water and sanitation franchise, citing Presidential Decree (PD) 1076 or the Water Code of the Philippines – the law that governs the ownership, appropriation, utilization, exploitation, development, conservation, and protection of water resources.

MIWD’s case against SBRI’s franchise, however, is still pending in court.

Section 4 of PD 1076 stated that the application for a water permit “shall be filed directly with NWR Board or deputized agents designated the Board…”

“Clearly, granting of water permits is within the competence of the NWRB, not in the local government units,” according to the DILG.

The participation of local governments is merely confined in the processing, posting and sending of notices of application/petition, it added.

As to the argument that the city government has the power to enact ordinances granting franchises anchored on Section 458 (a)(3) of Republic Act 7160 (Local Government Code) which states that the Sangguniang Panlungsod has the power to “enact ordinances granting franchise and authorizing the issuance of permits or licenses, upon such conditions and for such purposes intended to promote the general welfare of the inhabitants”, DILG clarified that such authority is in the nature of an exercise of police power.

“…(I)t behooves the local governments and their legislative bodies to act in conformity with the will of the State that is dictated through the legislative enactment of the Water Code of the Philippines and the Clean Water Act…,” stressed the DILG.

The Philippine Clean Water Act of 2004 or Republic Act 9275 is the law governing water quality management./PN


Please enter your comment!
Please enter your name here